Court affirms instruments as promissory notes; no additional stamping needed for admissibility

The court affirmed that the instruments in question are promissory notes as they contain an unconditional promise to pay a certain sum of money. It was held that the instruments did not require additional stamping for admissibility in evidence since they were executed outside India and the promisee had brought the suits without endorsing or negotiating the instruments. The civil revision petitions were dismissed, and the petitioner was ordered to bear the costs.

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Issues Involved:

1. Whether the instruments sued upon are promissory notes.
2. Whether the instruments are properly stamped and admissible in evidence.

Detailed Analysis:

Issue 1: Whether the instruments sued upon are promissory notes

The petitioner contended that the instruments on which the suits were based are not promissory notes. The respondent, however, argued that the instruments fulfill the requirements of a promissory note as defined under Sections 4 and 5 of the Negotiable Instruments Act.

The court referred to Section 4 of the Act, which defines a promissory note as an instrument in writing containing an unconditional undertaking signed by the maker to pay a certain sum of money to a certain person or to the bearer of the instrument. Section 5 clarifies that a promise to pay is not conditional merely because the time for payment is specified.

The court examined the terms of the instruments, noting that despite some differences in the number of executants and the amounts, the recitals in both instruments were similar. The instruments contained an unconditional undertaking to pay specific amounts, signed by the petitioner. Although the instruments mentioned terms regarding the time for payment, interest, and jurisdiction, these did not affect the unconditional nature of the promise to pay.

The court cited the case of The Nappa Chettiar v. Andiappa Chettiar, where it was held that a promissory note specifying a time for payment does not make the promise conditional. The court concluded that the instruments in question are indeed promissory notes as they contain an unconditional promise to pay a certain sum of money.

Issue 2: Whether the instruments are properly stamped and admissible in evidence

The petitioner argued that the instruments, executed outside India and payable otherwise than on demand, should be properly stamped under Article 49(b) of the Stamp Act. The respondent countered that the instruments were stamped according to the law prevailing at the place of execution and that there was no need for further stamping under Section 19 of the Stamp Act.

Section 19 of the Stamp Act states that the first holder in India of a promissory note drawn outside India must affix the proper stamp before endorsing or negotiating it in India. However, since the respondent, who is the promisee, had instituted the suits without endorsing or negotiating the instruments, the obligation to stamp did not arise.

The court referred to several precedents, including Griffin v. Weatherby, Simulu Ebrahim Rowthean v. Abdul Rahiman Mohamed, and Mohamed Rowthan v. Mohamed Husin Rowthan, which supported the view that instruments executed outside India do not require additional stamping in India unless endorsed or negotiated.

The court concluded that since the promisee himself had brought the suits and there was no endorsement or negotiation, the instruments did not require further stamping. Therefore, the objection regarding the inadmissibility of the promissory notes in evidence was rightly overruled by the lower court.

Conclusion:

The civil revision petitions were dismissed, with the court affirming that the instruments in question are promissory notes and are admissible in evidence without additional stamping. The petitioner was ordered to bear the costs.

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